Delegated Bodies

Chairman and CEO

The Board of Directors appoints its Chairman, in accordance with the Company Bylaws when the Shareholders’ Meeting has not already done so. The Board of Directors appointed Marco Tronchetti Provera as Chairman and CEO in the meeting held on April 21, 2011.

The Chairman is the Company’s legal representative.

The Chairman and CEO, Marco Tronchetti Provera, is responsible for the following organisational functions:

  • relations with shareholders and the information provided to them;
  • defining the strategies concerning the general policy and the development policy for the Company and the Group, as well as the extraordinary transactions to be submitted to the Board of Directors;
  • proposals to appoint General Managers and the remuneration due and payable to them, after having consulted the Remuneration Committee;
  • all forms of communications to the market.

As has been said, the Chairman of the Board of Directors shall use all reasonable endeavours so that the documentation relating to the items on the Agenda is submitted to the Directors and to the Auditors suitably in advance to permit the Directors to express an informed opinion on the topics to be examined by them28. In this regard, the reader is referred to the section “Role of the Board of Directors”.

The Chairman and CEO is conferred with full powers – to be exercised with separate signature – necessary to perform the actions concerning the Company’s business in its various executions, none excluded. All the foregoing with the power to issue special and general mandates, conferring on the representative the authority to sign, individually or collectively, on behalf of the Company and with the responsibilities he shall deem appropriate to assure the Company’s best interests, including the power to subdelegate.

The Board of Directors has identified the limits to the management powers conferred on the Chairman and CEO, which have been qualified as the internal limits of the relationship between the delegating collegial body and the person with delegated powers. In particular, the following internal limits have been identified: the power to issue guarantees for the Company’s bonds and the subsidiaries’ bonds for a value exceeding euro 25 million, or in the interests of third parties concerning bonds with a value exceeding euro 10 million; in the latter case the Chairman’s signature is to be accompanied by that of another legal representative with similar powers (in particular, reference is made to “Executives with strategic business responsibilities”).

Company organisation

The Board of Directors redefined its own organisational model during the 2013 financial year, with the aim of maximising supervision of the business activities and the geographic coordination of all the operating activities associated with product development and management.

In particular, the Operations General Division has been established that reports directly to the Chairman and CEO, this Division has been entrusted to Gregorio Borgo (previously responsible for the Asia-Pacific region), to which, in turn, the organisational units associated with the operational management (Industrial Operations, Supply Chain, Product and OE Aftermarket and Marketing), the Industrial and Motorcycle Business Units and the various Regions (Africa, Middle East and India, Asia-Pacific, Central Europe, North West Europe, South Europe, Latam, Nafta and Russia and Nordics) report. The aim is to strengthen the industrial and commercial synergies to support the commercial development in the best way possible, in the context of increasingly competitive markets.

The Regions continue to report directly to the Chairman and Managing Director regarding governance and overall coordination aspects.

In addition to the Operations General Division, the staff functions and the Chief Technical Officer Maurizio Boiocchi also report to the Chairman and CEO, and the Product, Processes, Quality, Original Equipment and Motorsport areas continue to report to the Chief Technical Officer, the foregoing are all strongly associated with research, innovation and type approvals with car manufacturers, the latter representing fundamental leverages to implement the Premium strategy. These areas report to the Chief Technical Officer, also with reference to the various countries.

The current organisation that was decisive for the distribution and consolidation of best practices between the headquarters and the various Regions has developed towards a model that exceeded the role of the Chief Commercial Officer, previously entrusted to Andrea Pirondini who left Pirelli at the end of 2013.

It is important to note that, at the Date of the Report, the following executives have strategic responsibilities within Pirelli, taking into account that during the 2013 financial year, and in the early months of the 2014 financial year, the Board of Directors extended the range of executives with strategic responsibilities (namely, officers who have the power to adopt management decisions which can impact the development and future prospects): the Chief Financial Officer Francesco Tanzi, the Chief Planning and Controlling Officer Maurizio Sala, the Operations General Manager Gregorio Borgo, the Chief Technical Officer Maurizio Boiocchi, the Chief Human Resources Officer Christian Vasino and the Senior Vice President Manufacturing Giuliano Menassi.

The powers relating to the specific functions assigned were attributed to the above-mentioned Key Managers, while more limited powers are conferred on other senior managers and managers, to be used in the context of the respective responsibilities.

Information to the Board

The Board of Directors and the Board of Statutory Auditors are kept informed of the activities performed, the general performance, the foreseeable outlook and the most significant transactions with a strategic, economic, financial and equity impact carried out by the Company or by its subsidiaries, in accordance with the provisions envisaged by law29 and by the Company Bylaws30. Pirelli believes that the completeness of the information made available to the Directors represents an essential condition to exercise correctly the tasks and responsibilities in management, policy-making and control inherent to the position of Directors and Statutory Auditors.

For this reason, Directors and Statutory Auditors receive a continuous flow of information from the Chairman and CEO to assure the transparency of company management; to assure the conditions to achieve an efficient and effective guidance and control of the Company’s activities and operation of the business by the Board of Directors and to provide the Board of Statutory Auditors with the information required to perform its role efficiently.

Where appropriate, the delegated bodies report on the transactions in which they have an interest, in their own right or on behalf of third parties. The notification is made promptly, and however, at least every three months, at the date of the Board of Directors’ meetings (and the meetings of the Executive Committee, if appointed) or by means of a written memorandum.

The Company has developed a special procedure to favour the orderly organisation of the flow of information, this procedure has been implemented since July 2002 and defines in detail, the rules to be followed in order to comply with the information reporting obligations.

The updated version of the Procedure on information flows to Directors and Statutory Auditors is reported on the Pirelli Internet website.

28 2011 Self-Regulatory Code: Application criterion 1.C.5.
29 Article 150, paragraph 1 of the Unified Finance Law (TUF).
30 Article 11 of the Company Bylaws.